Vacant Property Insurance

The insurance requirements for a vacant home are different than an occupied home. American Modern® has solutions for a vacancy of several months or just a few weeks.

Many of us will be asked to manage a vacant home at some time in our lives. There are many reasons:

You own rental property and are between tenants

You’ve moved for a new job but your house is unsold

A property is undergoing renovations

As executor, you are selling a house to close an estate

What most of us do not understand is that the insurance requirements for a vacant home are different than an occupied home. When a home becomes vacant, a standard homeowners policy may give the insurer the right to cancel mid-term, lower coverage levels, or even deny a claim.

What you need is a policy that is specifically written for the risks of a vacant property. American Modern has two solutions.

For a vacancy of up to a year, purchase a special policy

Named peril protection – Your policy covers those causes of loss listed by name in your policy documents (fire, lighting, wind, hail, explosion, and others). It covers the essentials, but not everything.

Actual cash value loss settlement – For a total or partial loss, we settle at the actual cash value (ACV) of the loss, which takes depreciation into account when settling your claim.

Term – We write 3-, 6- and 12-month policy terms.

Eligible home types

Home should be in fair or better condition, showing proper maintenance

Up to four-family construction, with no age restriction

Valued up to $500,000 (most states > $1M in a few)

Renovations in process are accepted without surcharge

Shorter vacancies can be handled with an endorsement

If you have a rental property or seasonal home insured in one of American Modern’s programs, the Vacancy Permission endorsement modifies the policy to accommodate a temporary vacancy, such as when you are between tenants or when the home is closed for the season.
Without this option, to maintain coverage you need to cancel the original policy, purchase a vacant policy, then go back to a regular policy when the vacancy ends. The Vacancy Permission endorsement eliminates that hassle.

Keep in mind that the property must meet the qualifications for the program in which it is insured.

But those two types of coverage are not the same. They differ as to how the thief entered the house.

A theft endorsement is broader and applies whether someone enters through a garage you leave open or forget to lock, or whether they kick in the side door.

A burglary endorsement – although a type of theft coverage – only applies if forced entry leaves signs of visible damage, such as a broken window. If items are stolen without signs of forced entry, a burglary claim will be rejected.

So what happens if there is a break-in but nothing is actually stolen? Vandalism coverage protects the policyholder if a would-be thief ruins the drywall or cabinets but does not manage to cut out the pipes or steal the heat pump.

Insurance policies do not always include coverage for theft, burglary and/or vandalism. When you purchase insurance coverage for your home or property – particularly for more vulnerable vacant homes – be sure to ask your agent to explain what it covers, the terms, and the limits.

Coverage is subject to policy terms, conditions, limitations, exclusions, underwriting review and approval, and may not be available for all risks or in all states. Rates and discounts vary, are determined by many factors and are subject to change.
Policies are written by one of the licensed insurers of American Modern Insurance Group, Inc., including American Modern Home Insurance Company d/b/a in CA American Modern Insurance Company (Lic. No 2222-8).